Spanish bankruptcies hit record in first quarter of 2013

MADRID – A record number of Spanish companies went bust in the first quarter of 2013 as companies remained under intense pressure from tight credit conditions and meager demand, a study showed on Monday.

The 2,564 firms filing for insolvency proceedings in first three months of the year was a 10 percent rise from the previous quarter and a 45 percent increase on the same period in 2012, the survey by credit rating agency Axesor said.

"Most Spanish businesses did not prepare for a crisis this big or this long, which could be a determining factor," said Javier Ramos-Juste, head of economic studies at Axesor.

Spain has been in its second recession in five years for the past 18 months and unemployment is more than 25 percent.

A credit freeze, liquidity problems, late payments and poor risk management contributed to the record number of bankruptcies since Spain's insolvency law changed in 2004, Axesor said.

Almost 28,000 companies have filed for bankruptcy since Spain's economic crisis set in five years ago, Axesor estimates.

Banks have tightened lending after a property boom turned to bust in 2008 and face stricter regulation since Spain received a bailout of about 41 billion euros ($52 billion) from international creditors last year.